Cigarette Prices Rise Up to ₹55 per Pack After New Excise Duty

The government’s revised excise duty on tobacco products has resulted in a noticeable increase in the retail price of cigarettes, with the highest rise reaching ₹55 per pack of 10 sticks. 

Price Impact of the New Excise Duty 

From February 2026, cigarettes attract an additional excise duty and cess above the 40% GST rate. Premium 76 mm cigarettes now cost ₹50 to ₹55 more per pack of 10 sticks.  

A pack of Wills Navy Cut (76 mm) that previously sold for ₹95 is expected to be priced around ₹120. 84 mm variants such as Gold Flake Kings, Wills Classic and Wills Classic Milds, formerly priced at ₹170, are projected to range between ₹220 and ₹225. Slim 97 mm cigarettes like Classic Connect, previously ₹300 for twenty sticks, are likely to see an MRP of about ₹350. 

Tax Structure Changes 

The amendment replaces the earlier framework of 28% GST plus compensation cess with a per‑stick excise duty that varies by length. The new regime also adds a cess on top of the highest GST slab, aligning India’s tobacco taxation with international public health standards. 

Industry Response and Distribution Concerns 

Distributors have begun billing existing stock under the 40% GST rate while awaiting fresh stock with revised MRPs.  

The All India Cigarette and Tobacco Distributors Federation estimates there are 8,000 to 9,000 stockists nationwide. Some firms have placed inventory on hold pending billing under the new structure, citing worries about potential smuggling and counterfeit activity. 

Read More: ITC Share Price in Focus as New Cigarette Tax Kicks In; Stock Sees Worst January Ever! 

Conclusion 

The revised excise duty has increased cigarette pack prices by ₹22 to ₹55 depending on brand and size. The tax change also introduces a per‑stick duty and higher cess, replacing the previous GST‑based model. Industry participants are adjusting distribution practices as the new pricing regime takes effect. 

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